Shanti, Samadhan and Sangarsh were sharing profits and losses in the ratio of 7: 5: 4.
Their balance sheet as on 31st .03.2013 was as follows:
Balance Sheet as on 31st March,2013.
Liabilities
|
Amount
|
Assets
|
Amount
|
Capitals:
|
Furniture
|
17000
| |
Shanti
|
23000
|
Machinery
|
18000
|
Samadhan
|
15000
|
Building
|
16000
|
Sangharsh
|
12000
|
Cash
|
37000
|
Bills Payable
|
4000
| ||
Creditors
|
8000
| ||
Loan
|
10000
| ||
General Reserve
|
16000
| ||
88000
|
88000
|
Sangharsh died on 30 th June, 2013, and the following adjustments were agreed as per deed.
(1) Furniture, Machinery and Building are to be revalued at Rs. 16,700, Rs. 16,200, Rs. 30,100 respectively.
(2) Sangharsh’s share in goodwill is to be valued from firm’s goodwill which was valued at two times of the average profit of last three years.
Profits of the last three years - Rs. 30,000, Rs. 25,000, Rs. 20,000.
(3) His profit up to the date of death is to be calculated on the basis of profit of last year.
(4) Sagharsh was entitled to get a salary of Rs. 800 per month.
(5) Interest on capital at 10% to be allowed.
(6) Sangharsh’s drawing up to the date of death was Rs. 600 per month.
Prepare : (i) Sangarsh’s capital account showing amount payable to his executor.
(ii) Give working notes for share of goodwill and profit.
Solution:
In the books of the firm
Sangarsh’s Capital Account.
Particulars
|
Amount
|
Particulars
|
Amount
|
To Drawings A/c
|
1800
|
By Balance c/d
|
12000
|
To Executor’s Loan A/c
|
33650
|
By General Reserve A/c
|
4000
|
By P/L Adjustment A/c
|
3000
| ||
By Goodwill A/c
|
12500
| ||
By P/L Suspense A/c
|
1250
| ||
By Salaries A/c
|
2400
| ||
By Interest on Capital A/c
|
300
| ||
35450
|
35450
|
